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A Guide to Recurring Revenue for VoIP Resellers

If there’s one perpetual truth in business, it is that all revenue is good. However, not all revenue is built the same – and some types are better than others.

As a new, existing, or potential VoIP reseller, you will see lots of people talking about the incredible recurring revenue you can achieve by selling reliable, good quality hosted telephony. But, other than creating a lasting stream of income, what are the unique traits and strengths of recurring revenue?

Read on to find out why recurring revenue plays such a key role in growing a successful business and why becoming a VoIP reseller is so compelling.

Recurring revenue is a foundation for growth

Most businesses aim to grow perpetually, not sit stagnant once they’ve reached a baseline of success. Recurring revenue can play a key role in driving this incremental growth, eliminating the need to find new sales only to replace the revenue from your last ones.

With monthly billing and recurring payments, every new customer leads to growth in revenue. However, this is dependant on controlling your churn rate.

In short, recurring revenue only leads to growth if you manage to retain the vast majority of your customers, month after month. In this sense, the quality of your service is critical. If you provide flexible, scalable VoIP with a range of advanced features like follow-me and mobility support, your customers never have a reason to leave – and your growth has no reason to slow.

Recurring revenue brings predictability to cash flow

Maintaining healthy cash flow is probably the biggest challenge for new businesses. Your need to spend money in order to market, sell, and win new customers isn’t a good match for unpredictable, irregular income.

As a VoIP reseller, you can accurately estimate your future revenue. We’d recommend assuming a churn rate of 3-5% per month as part of this process, and using average customer revenues where possible.

Armed with that accurate forecast, you can make more informed decisions about when you spend your revenue on marketing – and how financial decisions now may affect your business in the coming months.

Recurring revenue can become largely passive

In any business, the time and money costs of administration can quickly get out of control. Suddenly, your healthy revenue doesn’t translate into a healthy profit.

For most people, the biggest appeal of becoming a VoIP reseller is that revenue from existing customers can, for the most part, become passive. A good VoIP reseller programme will include a highly-automated billing platform, while the right provider will be happy to assist with providing technical support and troubleshooting issues for your customers.

So you can spend your time on finding new business, reaching new customers, and adding even more sources of recurring revenue. All while keeping your costs low and turning revenue into the type of income that really counts – profit.